Electricity retailers are asking Texas’s power regulator to suspend immediate collections on the massive bills arising from the state’s electricity outage, as energy market participants try to mitigate the threat to their financial health, WSJ Pro Bankruptcy reported. Electric retailer Just Energy Group Inc. on Wednesday filed a request to the Texas Public Utility Commission to suspend invoice collections by the state’s grid operator, one of several similar requests for relief by retail energy companies stemming from last month’s extreme winter freeze. The weather event knocked power plants offline, led to blackouts and caused a jump in energy prices in the Texas wholesale market, saddling many energy players with big bills to the Electric Reliability Council of Texas, the state’s grid operator. Already, the invoices have tipped the state’s largest electricity cooperative into bankruptcy and threatened the finances of cities, municipal power authorities, energy retailers, cooperatives and others including Just Energy. The company, based in Toronto, filed the request Wednesday to stop Ercot, which collects money from electric retailers to pay power plants, from issuing or settling invoices until questions raised by government authorities in Texas around the energy crisis “are investigated, addressed and resolved.” Just Energy has estimated its bills related to the weather event could reach $40 million. Read more.
In related news, Texas regulators voted to claw back some payments to power generators for services they never actually provided during the state’s massive blackouts last month, Bloomberg News reported. The move could save an estimated $80 million to $150 million, according to the independent market monitor for Texas’s grid, which recommended the change. The Public Utility Commission of Texas agreed yesterday to adopt the recommendation, saying retailers and others shouldn’t pay for so-called ancillary services to help smooth power flows on the grid if they weren’t delivered. It’s the first significant step by regulators to address the astronomical power bills accrued during the unprecedented cold blast that crippled the state’s grid. At peak, more than four million homes and businesses were without electricity, and power prices soared to record levels. The impact on individual companies is only starting to emerge. Texas’s power market is facing a $2.5 billion shortfall as retail electricity providers and others are squeezed by massive power bills in the wake of the crisis. Brazos Electric Power Cooperative, the largest power generation and transmission cooperative in the state, filed for bankruptcy after racking up an estimated $2.1 billion in charges. Griddy Energy LLC, the retailer whose customers were slammed with exorbitant electric bills, defaulted on its debt to the grid operator and has been banned from participating in the market. Read more.
